Amazon.com shares slipped Thursday after the company projected lower-than-expected sales and operating income and said it plans to allocate a record amount to capital expenditure this year to build artificial-intelligence infrastructure. Amazon is the latest large tech company to unveil big spending plans for AI, even as some investors are starting to question whether the spending spree is prudent. “Virtually every application that we know of today is going to be reinvented with AI inside of it,” Amazon Chief Executive Andy Jassy said on a call with analysts Thursday. Amazon projected net sales for the first quarter of between $151 billion and $155.5 billion, as well as operating income of between $14 billion and $18 billion. The high end of each outlook came in below Wall Street’s expectations. The company’s net sales last quarter rose 10% from a year earlier to $187.79 billion, in line with analysts’ expectations. Net income rose 88% to $20 billion, higher than predicted.

Despite staying positive right through the day's session, Swiss stocks remained a bit sluggish on Thursday as investors largely refrained from making significant moves. The benchmark SMI, which moved between 12,587.52 and 12,644.60, settled with a modest gain of 44.76 points or 0.36% at 12,624.20. Julius Baer, Holcim, UBS Group and Swatch Group gained 3.4 to 4%. Sika, Adecco, Geberit and VAT Group closed higher by 2.1 to 2.75%. Partners Group, SIG Group, Sandoz Group, Swisscom, ABB and Kuehne + Nagel advanced 1 to 1.7%. Zurich Insurance Group, Lindt & Spruengli, Schindler Ps, Swiss Re and Swiss Life Holding also closed on firm note. Roche Holding closed down by about 1.25%. Novartis, Sonova, Richemont and SGS lost 0.4 to 0.9%. Temenos gained about 1.2% on news that it agreed to sell its Multifonds business to Montagu Private Equity for an enterprise value of $400 million. Shares of finance and insurance company Leonteq AG tanked more than 11% on lower earnings. The company reported a year-over-year drop in 2024 group net profit to 5.8 million francs from 20.6 million francs. Data from the State Secretariat for Economic Affairs, or SECA, said the unemployment rate in Switzerland rose to a non-seasonally adjusted 3% in January 2025 from 2.8% in the previous month, compared to market forecasts of 2.9%. This marked the highest jobless rate since May 2021.

Europe
European stocks closed higher on Thursday with several markets in the region climbing to record highs, as investors indulged in some hectic buying at several counters, reacting to quarterly earnings updates, and the Bank of England's decision to lower interest rate. The pan European Stoxx 600 climbed 1.17%. The U.K.'s FTSE 100 ended higher by 1.21%, Germany's DAX and France's CAC 40 both closed stronger by 1.47%, while Switzerland's SMI gained 0.36%. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Russia, Spain, Sweden and Turkiye closed notably higher. Norway ended weak, while Portugal closed flat. The BoE reduced its interest rate by a quarter-point, citing progress on disinflation path. The Monetary Policy Committee voted 7-2 to reduce the benchmark bank rate to 4.5% from 4.75%. The decision came in line with expectations. Previously, the BoE had reduced the rate by 25 basis points each in August and November last year. The MPC said a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate. 'Monetary policy would need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term had dissipated further,' the bank said. The MPC would decide the appropriate degree of monetary policy restrictiveness at each meeting, BoE added.

United States
Stocks showed a lack of direction over the course of the trading session on Thursday, with the major averages swinging back and forth across the unchanged line before eventually closing mixed. The Nasdaq and the S&P 500 reached new highs for the session going into the end the day, closing higher for the third straight session. The Nasdaq climbed 99.66 points or 0.5 percent to 19,791.99 and the S&P 500 rose 22.09 points or 0.4 percent to 6,083.57, but the narrower Dow fell 125.65 points or 0.3 percent to 44,747.63. The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday. The report, which is expected to show employment climbed by 170,000 jobs in January after jumping by 256,000 jobs in December, could impact the outlook for interest rates. A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended February 1st. The report said initial jobless claims climbed to 219,000, an increase of 11,000 from the previous week's revised level of 208,000. Philip Morris International posted higher-than-expected revenue in its fourth quarter, signaling its Zyn nicotine pouches continue to power results. The tobacco company logged operating income of $3.26 billion compared with $2.89 billion a year ago. Analysts polled by FactSet expected $3.51 billion. Revenue rose to $9.71 billion from $9.05 billion. Analysts polled by FactSet had expected $9.44 billion.

Asia
The stock markets in East Asia and Australia were mixed at the end of the week. While the stock markets in Japan and South Korea fell slightly, China rose. Overarching concerns about an escalation of the trade conflict between the US and China persist. Following Beijing's rather moderate response to the import tariffs on Chinese goods imposed by US President Trump, the market continues to focus on negotiations. However, investors remain cautious in view of the ongoing uncertainties.

Bonds
In the U.S. bond market, treasuries saw a modest pullback after moving notably higher in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up 1.8 basis points to 4.440 percent.

Analysis
Julius Baer lowers the Swatch target to 165 (180) CHF/Hold – Trader
UBS raises the Agricole target to EUR 16.80 (15.50) – Buy
UBS lowers the Siltronic target to EUR 43 (66) – Neutral

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